Pay off mortgage and start having fun!

getmore4less

newgirly wrote: »

Morning cath, we are IO (unable to switch to repayment!) Term was shortened from 33 to 12 years when I started this diary in 2010

(to save me looking for it)

what was the reason for that change, normally not recommended.

newgirly

Hi, it was my choice at the time as I thought it would put pressure on me to prioritise the mortgage as we had been terrible financially in the past. We had a virgin one account and had not paid anything off for a few years before, it was originally in 2010 repayment but i switched to io as we had a loft room and couldn't add to the mortgage so took loans which i transfered to 0% ccs , so I paused the mortgage repayments and overpaid the debts.

We have paid about 62k I think in five years ,so we must do better!

I've been costing up the home redecoration I want to do, £350 spent on the living room so far.

Other plans include:

DDS bedroom : new floor £200
Blinds. X3 £29
Paint £12
New socket £5
Duvet cover £20
Light £20

Total :£ 266


Ds1 bedroom :

Floor £80
Blind £13
Paint £12
Mattress £80
Valance £15

Total : £200



Ds2 bedroom:

Floor £220
Paint £12
Light £15
Furniture £120

Total :£ 367


Total : £1183 ,so that's £233 over budget if I can stick to it and without touching the hallway and kitchen. I hadn't planned on new floor I g coming from the budget but its very much needed so I'm going to try and go for it

Ds2 home ill today so I'm off work and able to spend a bit of time making plans!

getmore4less

The problem with a shorter term it makes the min payment(to hit target) much bigger.

£100k over 33years is £252pm over 13 is £695.
@ 3% its £398 upto £828.

How much is left to be paid off in the next 7years?

£100k over 7 is £1190 @ 3% £1322

newgirly

Just over £138k in 6 years 11months , so £1838 pm off the top of my head! We can't extend term though or change provider so have to just get on with clearing it.:o

getmore4less

So your £62k paid off estimate was a bit over.

2010 you said £160k mortgage, up from £90 odd when you bought the place.

£22k paid off in 5 years.

Are you really going to be able to find upwards of £2k pm.

newgirly

newgirly wrote: »

OK, I have decided to post my new total debt.


Old total figure owing £ 170,067



New figure including 0% overdraft £172,067:mad:

Theres not much else to say I think!

This figure is from June 2010 , I had previously just paid off £10k plus off the cc debts before starting the diary, plus we have spent just over £32k on the loft room.

£172 + £32 = £204k
O\s balance today £138k mortgage plus £8400 ish 0% cc =£146,400

£57,600 paid off ( we spent about 3k on a log cabin too) so I did under estimate a bit but only by £4k odd.

I don't know if we can make payments of £1838 pm for the mortgage ,but as I don't have any other options I need to try. The biggest change is that dh bought the company he works for and then had to buy a new unit to work from , so with that and a recession we have no profit showing,therefore can't remortgage or extend term.

We also need to pay about 80k for the factory unit we bought as we have a short term (3 yr ) loan. On the upside ten people still have jobs and the unit is worth more than we paid for it.

newgirly

Argh too hot !!!! Even used the air con today in the car, can't take poor little Eric the mini out at the moment as he has vinyl seats (they peel the skin off your legs when its hot!) No air con and I can't open his windows as there are cobwebs on them.

Successful day at work, one of the biggest London museums wants us to do their restoration work, well two out of nine of their libraries do so far. They came for a tour and loved us

On the home finance front its a bit of a worry, get more for less has frightened me a bit about whether we can afford to pay the mortgage. Nothing I wasn't already worried about myself latley , in fact I had a chat with dh at the weekend about the same thing.

Just feeling a bit eek :eek: at the moment with the task ahead, in the past when I've had to buckle down and live off not a lot ,I've been a sahm so have had much more time to do stuff.

getmore4less

You have not paid of £57k you spent most of it.

The unit being worth more is irrelivent unless you plan to sell it.

Is the business going to be generating the cashflow to pay off over £200k in 7 years probably more like £250k with interest(depending on the rate of the £80k)

I guess if it pays off the £80k in 3y then those payments get diverted to income(tax issue) for the mortgage for 4y that will cover most it and by then you may have enough history to review the needs of the business and be a better risk for lenders.

7 years is not long, get a proper 7y plan in place that pulls in enough income to cover the mortgage.

Alchemilla

Goodness that didn't pull any punches.

Newgirly any chance you might comment again on my blog please and see if I've fixed it? Xxx

newgirly

Yes we have spent 32k but it was to turn our 3 bed house in to a 4 bed with three growing teens , living in London does not give you many options due to the cost. Our house is now worth about £380k,partly due to the work and partly due to price rises. Its money well spent, not frittered on clothes and manicures.

I don't think I have posted our wages on this diary for many years ,so I'm not sure how you can comment whether we can afford the mortgage or not on the house.
The business does not have to cashflow our mortgage as we have drawn a steady wage for years from it, with many staff we would obviously be the last ones to go if the ship did start to sink.

The factory was bought with £120k cash deposit and we had no other options as rent is a minimum of 25k a year in our location. The price rising does matter as it will help having a higher value if need to take a mortgage out in three years, or in a worse case scenario we have to sell or fold the business, however the company has been going for over 125 years,hopefully we still have a few years left.

I am willing to listen to any advice you may have for me in this situation, I am well aware of the challenges ahead and am plenty worried enough already, I have to be honest though, your post is quite aggesive and not very supportive , which is the usual tone on the mfw board.

PS will have a look al!